| Significant Accounting Policies (Policies) | 12 Months Ended |
| Dec. 31, 2024 |
| Accounting Policies [Abstract] | |
| Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company prepared in accordance with generally accepted accounting principles in the United States of America (“ GAAP ”). All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. |
| Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates and assumptions include those related to allocating the transaction price for revenue recognition, inventory valuation, allowance for credit losses, fair value of the private placement warrant liabilities, fair value of the interest rate swap, self-insurance liability, valuation allowance on deferred tax assets, uncertain tax positions, apportionment for state income taxes, the tax receivable agreement liability, fair value of privately-held securities, impairment assessments of goodwill, intangible assets and other long-lived assets, asset retirement obligations, contingent consideration and the recognition and measurement of loss contingencies. Management believes that its estimates and assumptions are reasonable in the circumstances; however, actual results could differ materially from those estimates. |
| Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a remaining maturity of three months or less when acquired to be cash equivalents. |
| Restricted Cash | Restricted Cash The Company collects cash on behalf of customers under certain contracts which it deposits daily into Company bank accounts and transfers regularly to customer bank accounts. Restricted cash primarily represents customer cash collected but not yet remitted to the customer. Restricted cash is classified as a current asset and the corresponding liability for amounts due to customers is within current liabilities. |
| Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents, accounts receivable and unbilled receivables. The Company limits cash and cash equivalents to highly rated financial institutions. Significant customers are those which represent more than 10 % of the Company’s total revenue or ac counts receivable, net. R evenue from the single Government Solutions customer exceeding 10 % of total revenue is presented below:
For the Year Ended December 31,
2024 2023 2022
City of New York Department of Transportation 15.8 % 16.9 % 19.5 % The City of New York Department of Transportation (“ NYCDOT ”) represented 17.2 % and 18.3 % of total accounts receivable, net as of December 31, 2024 and 2023, respectively. There is no material reserve related to NYCDOT open receivables as amounts are deemed collectible based on current conditions and expectations. No other Government Solutions customer exceeded 10% of total accounts receivable, net as of any period presented. Significant customer revenue concentrations generated through the Company’s Commercial Services partners as a percent of total revenue are presented below:
For the Year Ended December 31,
2024 2023 2022
Hertz Corporation 10.8 % 11.8 % 11.1 %
Avis Budget Group, Inc. 13.5 % 13.6 % 13.0 %
Enterprise Mobility 11.7 % 10.4 % 9.3 % No Commercial Services customer exceeded 10 % of total accounts receivable, net as of December 31, 2024 or 2023. There were no significant customer concentrations that exceeded 10% of total revenue or accounts receivables, net for the Parking Solutions segment as of or for any period presented . |
| Allowance for Credit Losses | Allowance for Credit Losses Accounts receivable and unbilled receivables are uncollateralized customer obligations arising from the sale of products or services. Accounts receivable and unbilled receivables have normal trade terms of less than one year and are initially stated at the amounts billed to the customers and subsequently measured at amortized cost net of allowance for credit losses. Unbilled receivables are recorded when revenues have been earned but have not been included on a customer invoice through the end of the current period. Unbilled receivables were $ 48.2 million and $ 37.1 million as of December 31, 2024 and 2023, respectively. The Company reviews historical credit losses and customer payment trends on receivables and develops loss estimates as of the balance sheet date, which includes adjustments for current and future expectations. It identifies pools of receivables based on the type of business, industry in which the customer operates and historical credit loss patterns. The Company uses collection assumptions (typically at the customer level) to estimate expected credit losses. Receivables are written off against the allowance for credit losses when it is probable that amounts will not be collected based on the terms of the customer contracts, and subsequent recoveries reverse the previous write-off and apply to the receivable in the period recovered. No interest or late fees are charged on delinquent accounts. The Company periodically evaluates the adequacy of its allowance for expected credit losses and adjusts appropriately. The following presents the activity in the allowance for credit losses by reportable segment for the years ended December 31, 2023 and 2024, respecti vely:
($ in thousands) Commercial (1) Government Parking Total
Balance at January 1, 2023 $ 11,177 $ 4,573 $ 157 $ 15,907
Credit loss expense (income) 11,153 ( 1,953 ) ( 146 ) 9,054
Write-offs, net of recoveries ( 6,669 ) ( 194 ) 415 ( 6,448 )
Balance at December 31, 2023 $ 15,661 $ 2,426 $ 426 $ 18,513
Credit loss expense (income) 14,670 ( 1,979 ) 311 13,002
Write-offs, net of recoveries ( 14,293 ) ( 115 ) ( 89 ) ( 14,497 )
Balance at December 31, 2024 $ 16,038 $ 332 $ 648 $ 17,018 (1) This primarily consists of receivables from drivers of rental cars for which the Company bills on behalf of its customers. Receivables not collected from drivers within a defined number of days are transferred to customers subject to applicable bad debt sharing agreements. The allowance for credit losses for driver-billed receivables w as 85 % and 88 % of the total Commercial Services allowance for credit losses as of December 31, 2024 and 2023, respectively. |
| Inventory | Inventory Inventories consist of parts and electronic components used in the production of parking management related hardware sold to cer tain Parking Solutions customers and photo enforcement systems sold to certain Government Solutions customers. Inventories for the Parking Solutions business were stated at cost on a first-in, first-out basis and the total carrying value was approximately $ 8.4 million and $ 10.0 million as of December 31, 2024 and 2023, respectively. Inventories for the Government Solutions international business were stated at a weighted average cost and the total carrying value was $ 7.1 million and $ 8.0 million as of December 31, 2024 and 2023, respectively. The Company assesses the value of its inventory and writes down the cost to net realizable value upon evaluation of historical experience and assumptions regarding future usage, and any such write down establishes a new cost basis for the items. Total finished goods were approximately $ 3.1 million and $ 3.4 million as of December 31, 2024 and 2023, respectively. |
| Installation and Service Parts | Installation and Service Parts Installation and service parts consist of components used in the construction and maintenance of the Company's photo enforcement systems. Installation and service parts are stated at cost and are reclassified to property and equipment upon initiation of construction and subsequently placed in service. Installation and service parts used in repairs and maintenance are recorded as operating expenses. See Impairment of Long-lived Assets section below for a discussion of the write-down of installation and service parts that no longer had future use. |
| Property and Equipment | Property and Equipment Property and equipment is stated at cost less accumulated depreciation. All repairs and maintenance costs are expensed as incurred. Depreciation is recorded on a straight-line basis over the estimated useful lives of the related assets as follows:
Equipment 3 - 7 years
Computer equipment 3 - 5 years
Furniture 3 - 10 years
Automobiles 3 - 7 years
Software 3 - 7 years
Leasehold improvements Shorter of lease term or estimated useful life Equipment relates to equipment installed at customer sites and certain installation costs that qualify for capitalization. Software costs include certain internal and external costs associated with the development of software that are incurred during the application development stage. In addition, a modification or upgrade to existing software is capitalized only to the extent it results in additional functionality to existing software. Software mainte nance and training costs are expensed as incurred. |
| Investment in Privately-held Securities | Investment in Privately-held Securities The Company holds an investment in privately-held equity securities which is recorded at cost and adjusted based on observable transactions for same or similar investments or for impairment. Investment gains and losses are recorded in other income, net. Valuation of privately-held securities requires judgment due to the lack of readily available observable market data. The carrying value is not adjusted if there are no identified events that would indicate a need for upward or downward adjustments or changes in circumstances that may indicate impairment. In determining the estimated fair value of its investment, the Company utilizes the most recent data available. The Company assesses its investment for impairment quarterly using both qualitative and quantitative factors. If an investment is considered impaired, an impairment loss is recognized and a new carrying value is established for the investment. There were no indicators of impairment during the years ended December 31, 2024 or December 31, 2023. The Company recorded a $ 1.3 million impairment during the year ended December 31, 2022 within other income, net on the consolidated statements of operations. |
| Goodwill | Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired in business combinations. Goodwill is assessed for impairment at least annually at the reporting unit level or more frequently if events or changes in circumstances indicate the carrying value may not be recoverable. If, based on a qualitative analysis, it is determined more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, a quantitative impairment test is performed. Reporting units are identified by assessing whether the components of the Company’s operating segments constitute businesses for which discrete financial information is available, if segment management regularly reviews the operating results of those components and if any of the components can be aggregated based on economic similarities and other factors. Application of the goodwill impairment test requires judgment, including the identification of reporting units, the assignment of assets (including goodwill) to those reporting units and the determination of the fair value of each reporting unit. The date of the Company’s annual impairment analysis is October 1. The Company has four reporting units for the purposes of assessing potential impairment of goodwill which include Commercial Services, Government Solutions North America, Government Solutions International and Parking Solutions. The Company estimates the fair value of its reporting units based on a combination of an income approach or more specifically, a discounted cash flow method (“ DCF Method ”) and a market approach employing the public company market multiple method. The DCF Method is based on projected future cash flows and terminal value estimates discounted to their present values using a market-participant weighted average cost of capital. Significant estimates and assumptions used in the DCF Method include forecasts of future revenue growth rates, EBITDA margin percentages, terminal growth rates and discount rates. The Company applies discount rates that are commensurate with the risks and uncertainties inherent in the respective reporting units and its internally developed projections of future cash flows. The market approach utilizes a blend of revenue and EBITDA multiples from guideline public companies which are comparable to it in size, profitability and other factors to estimate the fair value of the reporting units. Significant estimates and assumptions used in the market approach include the selection of guideline public companies, revenue and EBITDA projections, the selection of revenue and EBITDA multiples and the application of a control premium. In connection with its annual impairment assessment, the Company determined it was more likely than not that the fair values of its reporting units were in excess of their carrying values for the Commercial Services, Government Solutions North America and Government Solutions International reporting units based on qualitative factors. The Company performed a quantitative impairment test for its Parking Solutions reporting unit as of October 1, 2024. This was due to recent performance that unfavorably impacted the Parking Solutions business, including lower revenue growth, higher customer churn and lower profitability margins than previously estimated. The fair value of this reporting unit was determined by equally weighting the results of the DCF and market approach methods described above. Based on the results of its quantitative review, the Company concluded an impairment to goodwill was necessary because the reporting unit's carrying value exceeded the estimated fair value. The Company recorded a $ 97.1 million impairment of goodwill in the Parking Solutions segment during fiscal year 2024, which is presented in the goodwill impairment line item on the consolidated statements of operations. |
| Intangible Assets | Intangible Assets Intangible assets represent existing customer relationships, trademarks, patents, developed technology (hardware and software) and non-compete agreements. Intangible assets are amortized over their respective estimated useful lives on a straight-line basis, which approximates the utilization of their expected future benefits. Amortization of intangible assets is included in depreciation, amortization and (gain) loss on disposal of assets, net in the consolidated statements of operations. The Company annually evaluates the estimated remaining useful lives of its intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization. |
| Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews its long-lived assets (including intangible assets with finite useful lives and installation and service parts) for impairment whenever events or circumstances indicate that the carrying amount of an asset or an asset group may not be fully recoverable. The Company assesses recoverability by comparing the estimated undiscounted future cash flows expected to be generated by the asset or asset group with its carrying value. If the carrying value of the asset or asset group exceeds the estimated undiscounted future cash flows, an impairment loss is recognized for the difference between the estimated fair value and the carrying value. During the year ended December 31, 2024, the Company recorded a $ 0.2 million impairment related to the write-down of installation and service parts that no longer had future use within the operating expenses line item in the Government Solutions segment. D uring the year ended December 31, 2023, the Company recorded a $ 4.3 million impairment which included a $ 3.9 million write-down of installation and service parts that no longer had future use within the operating expenses line item in the Government Solutions segment, and $ 0.4 million impairment of an ROU asset within the selling, general and administrative expenses line item in the Parking Solutions segment. The Company had $ 0.7 million of impairment related to certain photo enforcement programs that ended during the year ended December 31, 2022 within the depreciation, amortization and (gain) loss on disposal of assets, net line item on the consolidated statements of operations. |
| Self-Insurance | Self-Insurance The Company is self-insured for medical costs and has stop-loss insurance policies to limit its exposure to individual and aggregate claims made. Liabilities for these programs are estimated based on outstanding claims and claims estimated to be incurred but not yet reported using historical loss experience. These estimates are subject to variability due to changes in trends of losses for outstanding claims and incurred but not reported claims, including external factors such as the number, and cost of claims, benefit level changes and claim settlement patterns. |
| Warrants | Warrants As of December 31, 2022, there were warrants outstanding to acquire 19,999,967 shares of the Company’s Class A Common Stock including: (i) 6,666,666 Private Placement Warrants and (ii) 13,333,301 warrants issued in connection with the initial public offering (the “ Public Warrants ” and, together with the Private Placement Warrants, the “ Warrants ”). The Warrants had a five-year term and expired in October 2023, unless they were redeemed or exercised prior to expiration. As of December 31, 2023, all Warrants were either exercised by the holder or redeemed by the Company. See Note 12, Shareholders' Equity , for additional details on warrant exercises. The Company accounted for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance under Financial Accounting Standards Board (“ FASB ”) ASC 480, Distinguishing Liabilities from Equity (“ ASC 480 ”) and ASC 815, Derivatives and Hedging (“ ASC 815 ”). The assessment considered whether the warrants were freestanding financial instruments pursuant to ASC 480, met the definition of a liability pursuant to ASC 480, and whether the warrants met all of the requirements for equity classification under ASC 815, including whether the warrants were indexed to the Company’s own common shares, among other conditions for equity classification. For warrants that met all of the criteria for equity classification, the warrants were required to be recorded as a component of additional paid-in capital at the time of issuance. Warrants that did not meet all the criteria for equity classification were recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants were recognized as a non-cash gain or loss on the consolidated statements of operations. The Company’s Public Warrants met the criteria for equity classification and accordingly, were reported as a component of stockholders’ equity while the Company’s Private Placement Warrants were classified as a liability. The fair value of the Private Placement Warrants was estimated at period-end using a Black-Scholes option pricing model. Shares issuable under the Warrants were considered for inclusion in the diluted share count in accordance with GAAP. |
| Interest Rate Swap | Interest Rate Swap In December 2022, the Company entered into a cancellable interest rate swap agreement to hedge its exposure to interest rate fluctuations associated with the LIBOR (now transitioned to Term Secured Overnight Financing Rate, “ SOFR ”) portion of the variable interest rate on its 2021 Term Loan. Under the interest rate swap agreement, the Company paid a fixed rate of 5.17 % and the counterparty paid a variable interest rate. The Company entered into an International Swaps and Derivatives Association, Inc. Master Agreement with the counterparty which provided for the net settlement of all, or a specified group, of derivative transactions through a single payment. The notional amount on the interest rate swap was $ 675.0 million. The Company had the option to effectively terminate the interest rate swap agreement starting in December 2023, and monthly thereafter until December 2025. The Company treated the interest rate swap as an economic hedge for accounting purposes and any changes in the fair value of the derivative instrument (including accrued interest) and related cash receipts or payments were recorded in the consolidated statements of operations within the loss (gain) on interest rate swap line item. The Company exercised its option to cancel the interest rate swap agreement during the third quarter of fiscal year 2024. The following details the components of the loss (gain) on interest rate swap for the respective periods:
For the Year Ended December 31,
($ in thousands) 2024 2023 2022
Change in fair value $ 1,316 $ ( 320 ) $ ( 996 )
Cash (receipts) payments ( 822 ) 1,137 —
Total loss (gain) on interest rate swap $ 494 $ 817 $ ( 996 ) The effect of remeasurement to fair value was recorded within the operating activities section and the monthly cash proceeds received or payments made were recorded within the investing activities section in the consolidated statements of cash flows. See below for further discussion on the fair value measurement of the interest rate swap. |
| Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurement, includes a single definition of fair value to be used for financial reporting purposes, provides a framework for applying this definition and for measuring fair value under GAAP, and establishes a fair value hierarchy that categorizes into three levels the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are summarized as follows: Level 1 – Fair value is based on observable inputs such as quoted prices for identical assets or liabilities in active markets. Level 2 – Fair value is determined using quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or inputs other than quoted prices that are directly or indirectly observable. Level 3 – Fair value is determined using one or more significant inputs that are unobservable in active markets at the measurement date, such as a pricing model, discounted cash flow, or similar technique. The carrying amounts reported in the Company’s consolidated balance sheets for cash, accounts receivable, accounts payable and accrued liabilities approximate fair value due to the immediate to short-term maturity of these financial instruments. The estimated fair value of the Company’s long-term debt was calculated based upon available market information. The carrying value and the estimated fair value of long-term debt are as follows:
Level in December 31, 2024 December 31, 2023
Fair Value Carrying Estimated Carrying Estimated
($ in thousands) Hierarchy Amount Fair Value Amount Fair Value
2021 Term Loan 2 $ 687,203 $ 699,916 $ 691,821 $ 709,872
Senior Notes 2 347,008 341,250 346,311 335,125 The Company had issued Private Placement Warrants (as discussed above) to acquire shares of its Class A Common Stock in connection with its initial public offering which had a five-year term and expired in October 2023. During fiscal year 2023, all Private Placement Warrants were exercised by the warrant holders. The following summarizes the changes in fair value of Private Placement Warrant liabilities included in net income and the impact of exercises for the year ended December 31, 2023:
($ in thousands) December 31, 2023
Beginning balance $ 24,066
Change in fair value of private placement warrants 24,966
Exercise of warrants ( 49,032 )
Ending balance $ — The change in fair value of private placement warrants consisted of adjustments related to the unexercised Private Placement Warrants re-measured to fair value at the end of the reporting period and the final mark-to-market adjustments for the exercised warrants. During the year ended December 31, 2023, 6.7 million Private Placement Warrants were exercised, which reduced our Private Placement Warrants liabilities by $ 49.0 million with an offset to common stock at par value and the remaining to additional paid in capital. The Company has an equity investment measured at cost with a carrying value of $ 1.9 million and $ 2.1 million as December 31, 2024 and 2023 respectively, and is only adjusted to fair value if there are identified events that would indicate a need for an upward or downward adjustment or changes in circumstances that may indicate impairment. The estimation of fair value requires the use of significant unobservable inputs, such as voting rights and obligations in the securities held, and is therefore classified within level 3 of the fair value hierarchy. There were no identified events that required a fair value adjustment during the years ended December 31, 2024 and 2023. The recurring fair value measurement of the interest rate swap was valued based on observable inputs for similar assets and liabilities including swaption values and other observable inputs for interest rates and yield curves and was classified within level 2 of the fair value hierarchy. The following presents the changes in the fair value of the interest rate swap in the gross balances within the below line items for the respective periods:
($ in thousands) December 31, 2024 December 31, 2023
Prepaid expenses and other current assets
Beginning balance $ 689 $ —
Change in fair value of interest rate swap ( 689 ) 689
Ending balance $ — $ 689
Other non-current assets
Beginning balance $ 627 $ 1,973
Change in fair value of interest rate swap ( 627 ) ( 1,346 )
Ending balance $ — $ 627
Accrued liabilities
Beginning balance $ — $ 977
Change in fair value of interest rate swap — ( 977 )
Ending balance $ — $ — The Company separately classified the current and non-current components based on the value of settlements due within 12 months (current) and greater than 12 months (non-current). The Company exercised its option to cancel the interest rate swap during the third quarter of fiscal year 2024. |
| Asset Retirement Obligations | Asset Retirement Obligations The Company records obligations to perform certain retirement activities on camera and speed enforcement systems in the period that the related assets are placed in service. Asset retirement obligations are contractual obligations to restore property to its initial state. These obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to operating expenses in the consolidated statements of operations. The offsetting asset is capitalized as part of the related asset’s carrying value and is depreciated over the asset’s estimated remaining useful life. When events and circumstances indicate that the original estimates used for asset retirement obligations may need revision, the Company reassesses the assumptions used and adjusts the liability appropriately. |
| Deferred Financing Costs | Deferred Financing Costs Deferred financing costs consist of the costs incurred to obtain long-term financing, including the Company’s credit facilities (see Note 8, Long-Term Debt ). These costs, which are a reduction to long-term debt on the consolidated balance sheets, are amortized over the term of the related debt, using the effective interest method for term debt and the straight-line me thod for revolving credit facilities. Amortization of deferred financing costs for fiscal years 2024, 2023 and 2022 was $ 4.1 m ill ion, $ 4.7 million and $ 5.5 million respectively. |
| Income Taxes | Income Taxes Income tax expense includes U.S and international current and deferred income taxes and interest and penalties on uncertain tax positions. Certain income and expenses are not reported in tax returns and financial statements in the same year. The tax effect of these temporary differences is reported as deferred income taxes. Deferred tax assets are reported net of a valuation allowance when it is more likely than not that a tax benefit will not be realized. All deferred income taxes are classified as long-term on our consolidated balance sheets. See Note 11, Income Taxes , for more information. |
| Stock-based Compensation | Stock-based Compensation In October 2018, the Company established the Verra Mobility 2018 Equity Incentive Plan which provides for a variety of stock-based awards for issuance to employees and directors. In May 2023, the Company's stockholders approved the Verra Mobility Corporation Amended and Restated 2018 Equity Incentive Plan (the “ 2018 Plan ”), which, among other things, increased the maximum number of shares available for awards by 5,000,000 shares. The Company grants RSUs, stock options and PSUs. The Company recognizes the fair value of RSUs based on the Company’s common stock price at market close on the date of the grant. The Company uses the Black-Scholes option pricing model to determine the fair value of stock options, and uses the Monte Carlo simulation model t o determine the fair value of PSUs containing market conditions. The Black-Scholes model requires an assumption regarding the expected life of the stock option, which the Company estim ated to be 6.25 years by applying the short-cut method permitted under SEC Staff Accounting Bulletin No. 110. PSUs granted vest at the end of a three-year period (or ratably over three years for certain grants), which matches the awards’ performance period. RSUs and stock options vest based on the continued service of the recipient. PSUs are issued upon continued service along with the relative satisfaction of a market condition that measures the Company’s total stockholder return relative to a comparably calculated return for a peer group during the performance period or to the Company's absolute total stockholder return. In addition, the Black-Scholes and the Monte Carlo models require assumptions to be made regarding the expected volatility of the Company’s stock price. Stock price volatility is determined by averaging an implied volatility with the measure of historical volatility for stock options and using the historical volatility for PSUs. The following represents our weighted average assumptions for stock options and PSUs granted for the respective p eriods:
For the Year Ended December 31,
2024 2023 2022
Stock options (1)
Weighted average expected volatility n/a 38.5 % 45.1 %
Weighted average risk-free interest rate n/a 4.28 % 2.94 %
PSUs
Weighted average expected volatility 35.2 % 43.8 % 48.0 %
Weighted average risk-free interest rate 4.26 % 4.29 % 2.78 % (1) There were no stock options granted during fiscal year 2024. Compensation expense for share-based awards is determined based on the grant date fair value. The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the share-based award. The compensation expense for the PSUs is recognized over the requisite service period regardless of whether the market condition is satisfied. Forfeitures are accounted for as they occur. See Note 13, Equity Incentive Plan , for more information on the Company’s share-based awards. |
| Revenue Recognition | Revenue Recognition Nature of Goods and Services The following is a description of principal activities, separated by reportable segments, from which the Company generates revenue: Commercial Services . The Commercial Services segment offers toll and violation management solutions for commercial fleet operators, including RACs, Direct Fleets and FMCs. The Company determined its performance obligation is a distinct stand-ready obligation, as there is an unspecified quantity of services provided that does not diminish, and the customer is being charged only when it uses the Company’s services, such as toll payment, title and registration, etc. Payment terms for contracts with commercial fleet and rental car companies vary, but are usually billed as services are performed. The Company recognizes revenue over time based on the number of transactions processed on behalf of customers during the period. It recognizes revenue on a net basis when it acts as an agent in the transaction. Government Solutions. The Government Solutions segment principally generates revenue by providing complete, end-to-end speed, red-light, school bus stop arm, and bus lane enforcement solutions. Products, when sold, are typically sold together with the services in a bundle for a majority of customers. The average initial term of a contract is three to five years . Payment terms for contracts with government agencies vary depending on whether the consideration is fixed or variable. Payment terms for contracts with fixed consideration are usually based on equal installments over the duration of the contract. Payment terms for contracts with variable consideration are usually billed and collected as citations are issued or paid. Certain mobile speed programs are billed per camera system deployed. In instances when the consideration expected from the customer is subject to variation, any variable consideration affecting revenue recognition is allocated to the distinct period (the monthly period) that it relates to. • Product sales (sale of camera systems and installation) – the camera systems and related installation services are an integrated solution and are accounted for as a single performance obligation. The revenues for this performance obligation are recognized when control of the product is transferred to the customer. • Service revenue – the Company provides a suite of services which may include camera maintenance, processing images taken by the camera, forwarding eligible images to the police department and processing payments on behalf of the municipality. The Company concluded that the suite of services as a whole represents one service offering and is a single performance obligation. The service offering is accounted for as a single continuous service. The Company applies the series guidance for those services as it stands ready to deliver those services over the contract period. The Company recognizes revenue from services over time, as they are performed. Many of the Company’s customer contracts include both product sales and service revenue. The Company applies judgment when determining whether the product sales and service offering are accounted for as combined performance obligation or distinct performance obligations. In contracts where title to the camera system does not transfer to the customer, the Company accounts for the contract as a single, combined performance obligation. This is because the customer receives the right to use the photo enforcement system and the service offering concurrently. For other contracts, the Company accounts for the products and services as distinct performance obligations because the camera systems and the related service solution are both capable of being distinct and are not highly interdependent and interrelated. In contracts with multiple performance obligations, consideration is allocated between separate products and services in a bundle based on their stand-alone selling prices (“ SSP ”). The Company estimates the SSP for its product sales using expected cost plus margin. The Company is unable to establish the SSP for its service offering based on observable prices as the services are sold for a wide range of amounts (the selling price is highly variable). As such, the SSP for service offerings included in these contracts is generally determined by applying a residual approach. Parking Solutions . The T2 Systems business offers an integrated suite of parking software, transaction processing and hardware solutions to its customers. Revenue is derived primarily from the sale of software as a service (“ SaaS ”) and specialized hardware. For bundled offerings, the Company accounts for individual products and services separately if they are distinct and allocates the transaction price based on the relative SSP. The Company is able to establish the SSP for its product sales based on the observable prices of products sold separately in comparable transactions. For professional services, the Company’s estimate of the standalone selling price is comprised of multiple factors which include a cost plus margin approach and the historical sales price of similar services. The Company is unable to establish the SSP for its software licenses based on observable prices given the same products are sold at a broad range of prices and a representative SSP is not discernible from past transactions or other observable evidence, as such, the SSP for software licenses included in a contract with multiple performance obligations is generally determined by applying a residual approach. The Company’s estimates of SSP are reassessed on a periodic basis or when facts and circumstances change. • The Company’s hosted parking management software products provide customers the ability to manage access to their parking lots and garages, issue physical or virtual parking permits and manage citations issued through enforcement devices. Revenue derived from these SaaS products is recognized ratably over the contractual service period beginning on the date the service is made available to the customer. • Service revenue derived from the Company’s professional services is recognized over time as the services are performed. Revenues for fixed-price service projects are generally recognized over time applying input methods to estimate progress to completion. • Revenue from product sales is recognized at a point in time when a customer takes control of the hardware, which typically occurs when the product is delivered and ownership is transferred to the customer. Remaining Performance Obligations Deferred revenue represents amounts that have been invoiced in advance which are expected to be recognized as revenue in future periods, and it primarily relates to the Government Solutions and Parking Solutions customers. As of December 31, 2024 and 2023, the Company had approximately $ 11.8 million and $ 13.1 million of deferred revenue in the Government Solutions segment, respectively. During the twelve months ended December 31, 2024 and 2023, the Company recognized $ 6.7 million and $ 5.2 million, respectively, of revenue, excluding exchange rate impact, related to amounts that were included in deferred revenue as of December 31, 2023 and 2022. As of December 31, 2024 and 2023, the Company had approximately $ 21.7 million and $ 19.7 million of deferred revenue in the Parking Solutions segment, respectively. During the twelve months ended December 31, 2024 and 2023, the Company recognized $ 18.7 million and $ 20.7 million, respectively, of revenue related to amounts that were included in deferred revenue as of December 31, 2023 and 2022. Remaining performance obligations represent the amount of contracted future revenue not yet recognized as the amounts relate to undelivered performance obligations, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods. The Company elected the practical expedients to omit disclosure for the amount of the transaction price allocated to remaining performance obligations with original expected contract length of one year or less and the amount that relates to variable consideration allocated to a wholly unsatisfied performance obligation to transfer a distinct good or service within a series of distinct goods or services that form a single performance obligation. As of December 31, 2024, total transaction price allocated to performance obligations in the Government Solutions segment that were unsatisfied or partially unsatisfied was $ 203.0 million, of which $ 88.0 million is expected to be recognized as revenue in the next twelve months and the rest over the remaining performance obligation period. |
| Credit Card Rebates | Credit Card Rebates The Company earns volume rebates from total spend on purchasing cards and recognizes the income in other income, net in the consolidated statements of operations. For the fiscal years ended December 31, 2024, 2023 and 2022, the Company rec orded $ 18.9 mi llion, $ 17.8 million, and $ 14.5 million respectively, related to rebates. |
| Advertising Costs | Advertising Costs The Company expenses advertising costs as incurred. Advertising costs for the fiscal years ended December 31, 2024, 2023 and 2022, w ere $ 1.6 m illion , $ 1.1 million and $ 1.0 million, respectively, and were included in selling, general, and administrative expenses in the consolidated statements of operations. |
| Foreign Currency | Foreign Currency Assets and liabilities denominated in foreign currencies that differ from their functional currencies are re-measured at the exchange rate on the balance sheet date. The foreign currency effect of the re-measurement is included in other income, net in the consolidated statements of operations. The impact of foreign currency re-measurement was losses of $ 0.4 million, $ 1.7 million and $ 0.7 million for the fiscal years ended December 31, 2024, 2023 and 2022, respectively. The assets and liabilities of our foreign subsidiaries whose functional currency is not the U.S. dollar are translated into U.S. dollars at current exchange rates while revenue and expenses are translated from functional currencies at average monthly exchange rates. The resulting translation adjustments are recorded in accumulated other comprehensive loss in stockholders’ equity. |
| Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Standards Adopted In November 2023, the Financial Accounting Standards Board (the “ FASB ”) issued Accounting Standards Update (“ ASU ”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . The ASU was intended to enhance disclosure related to significant segment expenses regularly provided to the Chief Operating Decision Maker (“ CODM ”), amounts presented as “other” within segment profit (loss), require that all annual disclosures are also reported for interim periods, further define the CODM and how they use segment profit (loss) to allocate resources, and require that entities with only a single reportable segment provide all required segment disclosures. The Company adopted this standard as of December 31, 2024 which included providing relevant disclosures within Note 17, Segment Reporting; however, there were no other impacts from the adoption of this standard. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions . The ASU clarified that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. It also required entities with investments in equity securities subject to contractual sale restrictions to disclose certain qualitative and quantitative information about such securities. The Company adopted this standard as of January 1, 2024. The adoption of this standard did not have an impact on the Company's financial statements or disclosures. Accounting Standards Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The ASU requires companies to disclose specific categories in the rate reconciliation, provide additional disclosure for reconciling items that exceed proscribed thresholds, and enhance disclosure regarding income taxes paid and sources of income (loss) from continuing operations including the tax expense (or benefit) disaggregated by federal, state and foreign taxes. The guidance is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on its financial statements and disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement- Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses . The ASU requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period at a disaggregated level. The guidance is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its financial statements and disclosures. |
